Forex Brokers with PAMM Accounts

Richard Montana | November 4, 2022

If you don’t have the time or knowledge required to trade manually by yourself, you might be considering a forex PAMM account. This allows you to get access to the market by investing in the trading strategies of others. If they have good results, you can make a profit minus and pay them a share for managing the account. On the other hand, if they are not trading successfully, you can suffer a loss. This handy guide can help you to understand how PAMM accounts works and what to look for before you get started.

What is a forex PAMM account?

Percentage allocation management module, also known as percentage allocation money management or PAMM, is a form of pooled money forex trading. An investor gets to allocate their money in desired proportion to the qualified trader(s)/money manager(s) of their choice. These traders are often called managers or masters, and they receive remuneration from the profits for managing investments.

Both individual investors and professional managers who aren’t expert forex traders can make use of managed forex accounts. This means that you could be investing in a PAMM account which is not managed by a professional trader which is why it is important to make sure that you do your due diligence on any PAMM account before you even think about investing.

Since the investor has no control over the trade once it has been executed, it is important to choose the right manager. The investor can choose from many candidates on the platform where they will add their track record to their profiles, so it is better to choose one with decent past performance. You can usually add and remove money managers as and when needed.

What is a MAM account?

Some traders get confused between a PAMM and MAM account. A MAM account is a unique master trading account that allows you to sub-allocate trades in a customisable way. It stands for Multi-Account Manager and it provides greater flexibility when sub-allocating trades to tailor the service according to each individual investor’s account size and risk profile.

This solution is designed mainly for fund and money managers to trade on behalf of multiple clients for a % of the profits. This makes it easy for money managers to execute block trades for multiple clients at the same time, and easily manage risk from one account.

PAMM accounts are the same as MAM in many ways. Both of them allow the fund managers, to manage many accounts straight from their own accounts. The big advantage is, that they don’t have to create an investment fund to manage other people’s accounts.

Are forex PAMM accounts profitable?

The PAMM system of forex brokers accumulate a certain pool of traders (PAMM traders) with certain experience, developed trading skills and, most importantly, verified results. When it comes to the software behind the account, profits and losses are distributed automatically, so there should be nothing to worry about there provided you are using a good broker.

However, no matter how good a PAMM account has been performing in the past, there can be no guarantee of what will happen in the future. Therefore, it is imperative to not risk more than you can afford to lose and choose a PAMM system that meets your trading style.

What is the difference between PAMM accounts and copy trading?

Copy trading exists under the umbrella of social trading, which basically means involving the traders to be social and interact with each other. On a social trading platform, new traders can interact with experts, ask questions, learn how they do their trades, and even watch their trades in real-time.

Social trading, or copy trading, is essentially the same as a PAMM, the difference being that the trader operates not in a common account, but in their own one, while the trades are being copied to the connected accounts of investors.

Similar to PAMM, traders can choose whose strategy to copy and collect the profit or loss once the trade is done. Traders will also need to pay a commission to the expert, regardless of whether they manage to earn profit or not.

Advantages of a forex PAMM account

  • Invest in managed accounts of experience traders
  • Trade the forex market automatically
  • Build a diversified portfolio of various PAMM accounts
  • Only pay a share of profitable trades
  • Choose how much and where you would like to invest

Disadvantages of a forex PAMM account

  • Hard to find a reliable money manager
  • PAMM can close at anytime
  • Not learning how to trade
  • Risky trading strategies being used
  • No control over the trading activity

What is the best forex PAMM account?

The best PAMM account for you will depend on what you are looking for in a trading strategy. Obviously, most of you will be looking for a profitable PAMM account which you can find. As we discussed above, this is not the only thing to be aware of.

You will need to review the PAMM accounts most important statistics including risk, drawdowns, profit, loss, duration, money management and more. Some of you may be happy to invest in a PAMM account that is using a dangerous martingale strategy which is high risk for the potential of high returns. Others may prefer a PAMM account that has been running for years and making small but stable returns.

Below you can see a selection of our best forex brokers that offer PAMM accounts. We have included those which have plenty of trading strategies to choose from which can cater to the needs of all types of forex trader.

Broker
Rating
Regulated
Min. Deposit
Founded
Max. Leverage
1.
AvaTrade Review

ADGM FRSA, ASIC, BVIFSC, CBI, FFAJ, FSCA, IIROC, JFSA

$100

2006

1:400

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
2.
IC Markets Review

ASIC, CySEC, FSA, SCB

$200

2007

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
3.
ACY Securities Review

ASIC, VFSC

$50

2013

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
4.
BlackBull Markets Review

FMA, FSPR

$200

2014

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
5.
Vantage Review

ASIC, CIMA, VFSC

$200

2009

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
6.
FP Markets Review

ASIC, CySEC, SVGFSA

$100

2005

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
7.
RoboForex Review

IFSC

$10

2009

1:1000

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
8.
InstaForex Review

BVIFSC, CySEC, SVGFSA

$1

2007

1:1000

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
9.
FXOpen Review

ASIC, FCA

$1

2005

1:500

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.
10.
Alpari Review

FSC, SVGFSA

$5

1998

1:1000

Between 74-89% of retail investor accounts lose money when trading CFDs with this provider.

Conclusion: should I use a forex PAMM account?

If you are looking for a hands-off solution to trade the forex market, then you will certainly want to consider a PAMM account. Along with trading robots and copy trading, it is one of the most popular ways to automate your trading using modern technologies.

The PAMM account is a unique product that allows investors to potentially earn without having to trade by themselves. You can choose to invest your funds in the accounts of other traders, who receive a percentage of the profits they earn from trading with your funds as a reward.

There are a handful of brokers that provide PAMM account so take your time to have a good look through and see if there are any trading strategies that catch your eye. Just keep in mind that historical results do not represent future returns. This is trading and anything can happen.

I don’t think anything can beat learning how to trade by yourself so that you can be responsible for your own decision. Practising how to trade and educating yourself as much as possible can help you to become a better trader in the long run.

About the Author

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Richard Montana
Richard has many years of experience in broker research, testing, analysis and reviews. He knows what to look for through years of trading himself with different brokers and listening to the feedback of others.

Review Methodology

For all of our broker reviews, we research, validate, analyse and compare what we deem to be the most important factors to consider when choosing a broker. This includes pros, cons and an overall rating based on our findings. We aim to help you find the best broker according to your own needs. You can read more about our review process.


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